Consider the following data for a hypotheticaleconomy that produces two goods: milk andhoney. Quantity Produced Prices Milk (litres)Honey (kg) Milk ($/litre) Honey ($/kg) Year1 110 45 2 6 Year 2 125 40 37 Compute nominalGDP for each year in this economy. Using year 1as the base year, compute real GDP for eachyear. What is the percentage change in real GDPfrom year 1 to year 2? Using year 1 as the baseyear, compute the price deflator for each year.Now compute the GDP deflator for each year,using year 2 as the base year. Explain why themeasures of real GDP growth (and growth in thedeflator) depend on the choice of base year.

Nominal GDP:Nominal GDP is a measure of the total value of all goods and services produced within a…

Consider the following data for a hypothetical economy that produces two goods: milk and honey. Quantity Produced Prices Milk (litres) Honey (kg) Milk ($/litre) Honey ($/kg) Year 1 110 45 2 6 Year 2 125 40 3 7 Compute nominal GDP for each year in this economy. Using year 1 as the base year, compute real GDP for each

Consider the following data for a hypothetical economy that produces two goods: milk and honey. Quantity Produced Prices Milk (litres) Honey (kg) Milk ($/litre) Honey ($/kg) Year 1 110 45 2 6 Year 2 125 40 3 7 Compute nominal GDP for each year in this economy. Using year 1 as the base year, compute real GDP for each

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

For the next questions, suppose that a simple economy produces only four goods and services: cars, homes, cheeseburgers and cheese. Assume all of the cheese are used in the production of the cheeseburgers. Also assume that Year1 is the base year. Using the information in the table, nominal GDP for this simple economy in year 1 equals Quantity Quantity Product Price (Year 1) Price (Year 2) (Year 1) (Year 2) Cars 50 25 100 30 Homes 10 50 15 60 Cheeseburgers 100 150 6 Cheese 50 2 75 3 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 2250 b 4150 2350 d 2700
(i) GDP Deflator for Year 1 (ii) GDP Deflator for Year 2
3. What are the three common pitfalls that people make when they do "cost-benefit" analysis. Explain why the opportunity cost of walking downtown to save $10 on a $2000 laptop is the same as walking downtown to save $10 on a $25 book.
The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009. Prices and Quantities Year Price of A Box of Chocolates Boxes of Chocolates Price of Watches Quantity ofWatches 2008 $4 100 $50 10 2009 $5 90 $50 15 2010 $5 100 $60 15 2011 $6 80 $65 12 What was nominal GDP, real GDP, and the GDP deflator for 2008? What was nominal GDP, real GDP, and the GDP deflator for 2009? Show your work. What was nominal GDP, real GDP, and the GDP deflator for 2010? Show your work. What was nominal GDP, real GDP, and the GDP deflator for 2011? Show your work. What was the inflation rate for 2010? Show your work. What was the inflation rate for 2011? Show your work.
Consider a simple economy that produces two goods: tacos and hot dogs. The table shows the economy's production over several years. Calculate the real GDP for 2009 using 2007 as the base year. Year Price of tacos (in dollars) Number of tacos Price of hot dogs (in dollars) Number of hot dogs 2007 4.00 3 3.00 2 2008 6.00 3 5.00 5 2009 7.00 4 8.00 9
Consider the data in the following table, which represents the total production of the country Byzantium, a country that produces only consumer goods. Table 1: Byzantium 2018 2019 2020 Quantity of Y 100 105 103 Quantity of X 5 3 1 Price of Y $5 $5 $5 Price of X $100 $105 $110 1. Calculate the nominal GDP for all three years ( 2. Calculate real GDP for all three years, using 2018 as the base year 3. Calculate the GDP deflator, using 2018 as the base year. Identify whether there was inflation from the previous year (*
Consider a simple economy that produces two goods: pencils and oranges. The following table shows the prices and quantities of the goods over a three-year period. Pencils Oranges Price Price Quantity Quantity (Dollars per pencil) (Number of pencils) (Dollars per orange) (Number of oranges) Year 2016 125 1 200 2017 2 170 230 2018 4 150 4 170 Use the information from the preceding table to fill in the following table. Real GDP Nominal GDP (Dollars) (Base year 2016, dollars) GDP Deflator Year 2016 2017 2018 From 2017 to 2018, nominal GDP , and real GDP The inflation rate in 2018 was Why is real GDP a more accurate measure of an economy's production than nominal GDP? Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes. Real GDP does not include the value of intermediate goods and services, but nominal GDP does. Real GDP is not influenced by price changes, but nominal GDP is.
A simple economy produces two goods, Apple Pies and Software. Price and quantity data are as follows: Production and Prices in Year 1 (Base year) Quantity 115 600 Product Apple Pies Software Price Per Unit Production and Prices in Year 2 Quantity 143.75 900.00 Product Apple Pies Software In Year 2, nominal GDP is equal to: $ and real GDP is $ $2.50 $60.00 Price Per Unit $3.75 $120.00 (enter both responses rounded to the nearest penny).
Consider a simple economy that produces two goods: beers and donuts. The following table shows the prices and quantities of the goods over a three-year period. Beers Donuts Price Quantity Price Quantity (Dollars per beer) (Number of beers) (Dollars per donut) (Number of donuts) 2 245 2 180 4 130 2 195 2 115 2 155 Use the information from the preceding table to fill in the following table. Year Nominal GDP Real GDP (Base Year 2016, dollars) GDP Deflator (Dollars) 2016 2017 2018 From 2017 to 2018, nominal GDP ________________, and real GDP __________ . The inflation rate in 2018 was ___________.
Consider the GDP deflator and real GDP, given in thousands of dollars, for the country of Barbados. Year year 1 year 2 year 3 Real GDP $20,597 $10,557 $40,977 What is the nominal GDP for year 1? What is the nominal GDP for year 2? GDP deflator What is the nominal GDP for year 3? 122 The base year, or base period, is year 3. For the given years, calculate the nominal GDP. Round your answers to the nearest dollar. 113 100 year 1: year 2: year 3: $ $ 13234 Incorrect 12457 Incorrect 40977
Consider a simple economy that produces two goods: apples and envelopes. The following table shows the prices and quantities of the goods over a three-year period. Year Apples Envelopes Price Quantity Price Quantity (Dollars per apple) (Number of apples) (Dollars per envelope) (Number of envelopes) 2016 2 115 5 175 2017 4 150 2 180 2018 1 100 2 160 Use the information from the preceding table to fill in the following table. Year Nominal GDP (Dollars) Real GDP (Base year 2016, dollars) GDP Deflator 2016 2017 2018 From 2017 to 2018, nominal GDP: (a. increased, b. decreased), and real GDP (a. increased, b. decreased) . The inflation rate in 2018 was: (a. -47.5%, b. -0.5%, c. 47.5%, d. 52.5%, e. 190.5%) . Why is real GDP a more accurate measure of an economy's production than nominal GDP? a. Real GDP includes the value of exports, but nominal GDP does not.…
Consider a simple economy that produces two goods: fries and burgers. The table shows the economy's production over several years. Calculate the real GDP for 2006 using 2004 as the base year. Year 2004 2005 2006 real GDP: Price of fries (in dollars) 6.00 8.00 9.00 Number of fries 4 4 5 Price of burgers (in dollars) 2.00 4.00 7.00 Number of burgers 3 5 8 dollars